Collapse is underway……

5 06 2017

(By the Doomstead Diner)

Due to my High & Mighty position as a Global Collapse Pundit, I am often asked the question of when precisely will Collapse arrive?  The people who ask me this question all come from 1st World countries.  They are also all reasonably well off with a computer, an internet connection, running water and enough food to eat.  While a few of us are relatively poor retirees, even none of us wants for the basics as of yet.  The Diner doesn’t get many readers from the underclass even here in Amerika, much less from the Global Underclass in places like Nigeria, Somalia, Sudan and Yemen.

The fact is, that for more than half the world population, Collapse is in full swing and well underway.  Two key bellweathers of where collapse is now are the areas of Electricity and Food.

This chart was around 16 years ago when I first became a peaknik….

In his seminal 1996 Paper The Olduvai Theory: Sliding Towards a Post-Industrial Stone Age, Richard Duncan mapped out the trajectory of where we would be as the years passed and fossil fuels became more difficult and expensive to mine up.  Besides powering all our cars and trucks for Happy Motoring and Just-in-Time delivery, the main thing our 1st World lifestyle requires is Electricity, and lots of it on demand, 24/7.  Although electricity can be produced in some “renewable” ways that don’t depend on a lot of fossil fuel energy at least directly, most of the global supply of electric power comes from Coal and Natural Gas.  Of the two, NG (NatGas) is slightly cleaner, but either way when you burn them, CO2 goes up in the atmosphere.  This of course is a problem climatically, but you have an even bigger problem socially and politically if you aren’t burning them.  Everything in the society as it has been constructed since Edison invented the Light Bulb in 1879 has depended on electricity to function.

Now, if all the toys like lights, refrigerators big screen TVs etc had been kept to just a few small countries and the rest of the world lived a simple subsistence farming lifestyle, the lucky few with the toys probably could have kept the juice flowing a lot longer.  Unfortunately however, once exposed to all the great toys, EVERYBODY wanted them.  The industrialists also salivated over all the profit to be made selling the toys to everyone.  So, everybody everywhere needed a grid, which the industrialists and their associated banksters extended Credit for “backward” Nation-States all over the globe to build their own power plants and string their own wires.  Now everybody in the country could have a lightbulb to see by and a fridge to keep the food cold.  More than that, the electricity also went to power water pumping stations and sewage treatment plants, so you could pack the Big Shities with even more people who use still more electricity.

This went on all over the globe, today there isn’t a major city or even a medium size town anywhere on the globe that isn’t wired for electricity, although many places that are now no longer have enough money to keep the juice flowing.

Where is the electricity going off first?  Obviously, in the poorest and most war torn countries across the Middle East and Africa.  These days, from Egypt to Tunisia, if they get 2 hours of electricity a day they are doing good.

The Lights Are Going Out in the Middle East

Public fury over rampant outages has sparked protests. In January, in one of the largest demonstrations since Hamas took control in Gaza a decade ago, ten thousand Palestinians, angered by the lack of power during a frigid winter, hurled stones and set tires ablaze outside the electricity company. Iraq has the world’s fifth-largest oil reserves, but, during the past two years, repeated anti-government demonstrations have erupted over blackouts that are rarely announced in advance and are of indefinite duration. It’s one issue that unites fractious Sunnis in the west, Shiites in the arid south, and Kurds in the mountainous north. In the midst of Yemen’s complex war, hundreds dared to take to the streets of Aden in February to protest prolonged outages. In Syria, supporters of President Bashar al-Assad in Latakia, the dynasty’s main stronghold, who had remained loyal for six years of civil war, drew the line over electricity. They staged a protest in January over a cutback to only one hour of power a day.

Over the past eight months, I’ve been struck by people talking less about the prospects of peace, the dangers of ISIS, or President Trump’s intentions in the Middle East than their own exhaustion from the trials of daily life. Families recounted groggily getting up in the middle of the night when power abruptly comes on in order to do laundry, carry out business transactions on computers, charge phones, or just bathe and flush toilets, until electricity, just as unpredictably, goes off again. Some families have stopped taking elevators; their terrified children have been stuck too often between floors. Students complained of freezing classrooms in winter, trying to study or write papers without computers, and reading at night by candlelight. The challenges will soon increase with the demands for power—and air-conditioning—surge, as summer temperatures reach a hundred and twenty-five degrees.

The reasons for these outages vary. With the exception of the Gulf states, infrastructure is old or inadequate in many of the twenty-three Arab countries. The region’s disparate wars, past and present, have damaged or destroyed electrical grids. Some governments, even in Iraq, can’t afford the cost of fueling plants around the clock. Epic corruption has compounded physical challenges. Politicians have delayed or prevented solutions if their cronies don’t get contracts to fuel, maintain, or build power plants.

Now you’ll note that at the end of the third paragraph there, the journalist implies that a big part of the problem is “political corruption”, but it’s really not.  It’s simply a lack of money.  These countries at one time were all Oil Exporters, although not on the scale of Saudi Arabia or Kuwait.  As their own supplies of oil have depleted they have become oil importers, except they neither have a sufficient mercantilist model running to bring in enough FOREX to buy oil, and they can’t get credit from the international banking cartel to keep buying.  Third World countries are being cut off from the Credit Lifeline, unlike the core countries at the center of credit creation like Britain, Germany and the FSoA.  All these 1st World countries are in just as bad fiscal deficit as the MENA countries, the only difference is they still can get credit and run the deficits even higher.  This works until it doesn’t anymore.

Beyond the credit issue is the War problem.  As the countries run out of money, more people become unemployed, businesses go bankrupt, tax collection drops off the map and government employees are laid off too.  It’s the classic deflationary spiral which printing more money doesn’t solve, since the notes become increasingly worthless.  For them to be worth anything in FOREX, somebody has to buy their Government Bonds, and that is precisely what is not happening.  So as society becomes increasingly impoverished, it descends into internecine warfare between factions trying to hold on to or increase their share of the ever shrinking pie.

The warfare ongoing in these nations has knock on effects for the 1st World Nations still trying to extract energy from some of these places.  To keep the oil flowing outward, they have to run very expensive military operations to at least maintain enough order that oil pipelines aren’t sabotaged on a daily basis.  The cost of the operations keeps going up, but the amount of money they can charge the customers for the oil inside their own countries does not keep going up.  Right now they have hit a ceiling around $50/bbl for what they can charge for the oil, and for the most part this is not a profit making price.  So all the corporations involved in Extraction & Production these days are surviving on further extensions of credit from the TBTF banks.  This also is a paradigm that can’t last. The other major problem now surfacing is the Food Distribution problem, and again this is hitting the African countries first and hardest.  It’s a combination problem of climate change, population overshoot and the warfare which results from those issues.

Currently, the UN lists 4 countries in extreme danger of famine in the coming year, Nigeria, Sudan, Somalia and Yemen.  They estimate currently there are 20M people at extreme risk, and I would bet the numbers are a good deal higher than that.

World faces four famines as Trump administration [and Australia] plans to slash foreign aid budget

‘Biggest humanitarian crisis since World War II’ about to engulf 20 million people, UN says, as governments only donate 10 per cent of funds needed for essential aid.

The world is facing a humanitarian crisis bigger than any in living memory, the UN has said, as four countries teeter on the brink of famine.

Twenty million people are at risk of starvation and facing water shortages in Somalia, Nigeria and Yemen, while parts of South Sudan are already officially suffering from famine.

While the UN said in February that at least $4.4 billion (£3.5 bn) was needed by the end of March to avert a hunger catastrophe across the four nations, the end of the month is fast approaching, and only 10 per cent of the necessary funds have been received from donor governments so far.

It doesn’t look too promising that the UN will be able to raise the $4B they say is necessary to feed all those hungry mouths, and none of the 1st World countries is too predisposed to handing out food aid when they all currently have problems with their own social welfare programs for food distribution.  Here in the FSoA, there are currently around 45M people on SNAP Cards at a current cost around $71B.  The Repugnants will no doubt try to cut this number in order to better fund the Pentagon, but they are not likely to send more money to Somalia.

Far as compassion for all the starving people globally goes in the general population, this also appears to be decreasing, although I don’t have statistics to back that up. It is just a general sense I get as I read the collapse blogosphere, in the commentariats generally.  The general attitude is, “It’s their own fault for being so stupid and not using Birth Control.  If they were never born, they wouldn’t have to die of starvation.”  Since they are mostly Black Africans currently starving, this is another reason a large swath of the white population here doesn’t care much about the problem.

There are all sorts of social and economic reasons why this problem spiraled out of control, having mainly to do with the production of cheap food through Industrial Agriculture and Endless Greed centered on the idea of Endless Growth, which is not possible on a Finite Planet.

More places on Earth were wired up with each passing year, and more people were bred up with each passing year.  The dependency on fossil fuels to keep this supposedly endless cycle of growth going became ever greater each year, all while this resource was being depleted more each year.  Eventually, an inflection point had to be hit, and we have hit it.

The thing is, for the relatively comfortable readers of the Doomstead Diner in the 1st World BAU seems to be continuing onward, even if you are a bit poorer than you were last year. 24/7 electricity is still available from the grid with only occasional interruptions.  Gas is still available at the pump, and if you are employed you probably can afford to buy it, although you need to be more careful about how much you drive around unless you are a 1%er.  The Rich are still lining up to buy EVs from Elon Musk, even though having a grid to support all electric transportation is out of the question.  The current grid can’t be maintained, and upgrading to handle that much throughput would take much thicker cables all across the network.  People carry on though as though this will all go on forever and Scientists & Engineers will solve all the problems with some magical new device.  IOW, they believe in Skittle Shitting Unicorns.

That’s not going to happen, however, so you’re back to the question of how long will it take your neighborhood in the UK or Germany or the FSoA to look like say Egypt today?  Well, if you go back in time a decade to Egypt in 2007, things were still looking pretty Peachy over there, especially in Tourist Traps like Cairo.  Terrorism wasn’t too huge a problem and the government of Hosni Mubarak appeared stable.  A decade later today, Egypt is basically a failed state only doing marginally better than places like Somalia and Sudan.  The only reason they’re doing as well as they are is because they are in an important strategic location on the Suez Canal and as such get support from the FSoA military.

So a good WAG here for how long it will take for the Collapse Level in 1st World countries to reach the level Egypt is at today is about a decade.  It could be a little shorter, it could be longer.  By then of course, Egypt will be in even WORSE shape, and who might still be left alive in Somalia is an open question.  Highly unlikely to be very many people though.  Over the next decade, the famines will spread and people will die, in numbers far exceeding the 20M to occur over the next year.  After a while, it’s unlikely we will get much news about this, and people here won’t care much about what they do hear.  They will have their own problems.

The original article can be found at the Doomstead Diner here: Dimming Bulb 3: Collapse Has ARRIVED!


A very interesting article by the folks at Doomstead Diner.  While their forecast of collapse could be off a few years, it seems as if they are looking at the same time-frame the Hills Group and Louis Arnoux are projecting for the Thermodynamic oil collapse.

Lastly, people need to realize COLLAPSE does not take place in a day, week, month or year.  It takes place over a period of time.  The folks at Doomstead Diner are making the case that it has ARRIVED.  It is just taking time to reach the more affluent countries will good printing presses.

So… it is going to be interesting to see how things unfold over the next 5-10 years.

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Some reflections on the Twilight of the Oil Age – part I

15 07 2016

Guest post by Louis Arnoux, republished from Ugo Bardi’s Cassandra’s Legacy blog…..

This three-part post was inspired by Ugo’s recent post concerning Will Renewables Ever ReplaceFossils? and recent discussions within Ugo’s discussion group on how is it that “Economists still don’t get it”?  It integrates also numerous discussion and exchanges I have had with colleagues and business partners over the last three years.

Introduction

Since at least the end of 2014 there has been increasing confusions about oil prices, whether so-called “Peak Oil” has already happened, or will happen in the future and when, matters of EROI (or EROEI) values for current energy sources and for alternatives, climate change and the phantasmatic 2oC warming limit, and concerning the feasibility of shifting rapidly to renewables or sustainable sources of energy supply.  Overall, it matters a great deal whether a reasonable time horizon to act is say 50 years, i.e. in the main the troubles that we are contemplating are taking place way past 2050, or if we are already in deep trouble and the timeframe to try and extricate ourselves is some 10 years. Answering this kind of question requires paying close attention to system boundary definitions and scrutinising all matters taken for granted.

It took over 50 years for climatologists to be heard and for politicians to reach the Paris Agreement re climate change (CC) at the close of the COP21, late last year.  As you no doubt can gather from the title, I am of the view that we do not have 50 years to agonise about oil.  In the three sections of this post I will first briefly take stock of where we are oil wise; I will then consider how this situation calls upon us to do our utter best to extricate ourselves from the current prevailing confusion and think straight about our predicament; and in the third part I will offer a few considerations concerning the near term, the next ten years – how to approach it, what cannot work and what may work, and the urgency to act, without delay.

Part 1 – Alice looking down the end of the barrel

In his recent post, Ugo contrasted the views of the Doomstead Diner‘s readers  with that of energy experts regarding the feasibility of replacing fossil fuels within a reasonable timeframe.  In my view, the Doomstead’s guests had a much better sense of the situation than the “experts” in Ugo’s survey.  To be blunt, along current prevailing lines we are not going to make it.  I am not just referring here to “business-as-usual” (BAU) parties holding for dear life onto fossil fuels and nukes.  I also include all current efforts at implementing alternatives and combating CC.  Here is why.

The energy cost of system replacement

What a great number of energy technology specialists miss are the challenges of whole system replacement – moving from fossil-based to 100% sustainable over a given period of time.  Of course, the prior question concerns the necessity or otherwise of whole system replacement.  For those of us who have already concluded that this is an urgent necessity, if only due to CC, no need to discuss this matter here.  For those who maybe are not yet clear on this point, hopefully, the matter will become a lot clearer a few paragraphs down.

So coming back for now to whole system replacement, the first challenge most remain blind to is the huge energy cost of whole system replacement in terms of both the 1st principle of thermodynamics (i.e. how much net energy is required to develop and deploy a whole alternative system, while the old one has to be kept going and be progressively replaced) and also concerning the 2nd principle (i.e. the waste heat involved in the whole system substitution process).  The implied issues are to figure out first how much total fossil primary energy is required by such a shift, in addition to what is required for ongoing BAU business and until such a time when any sustainable alternative has managed to become self-sustaining, and second to ascertain where this additional fossil energy may come from.

The end of the Oil Age is now

If we had a whole century ahead of us to transition, it would be comparatively easy.  Unfortunately, we no longer have that leisure since the second key challenge is the remaining timeframe for whole system replacement.  What most people miss is that the rapid end of the Oil Age began in 2012 and will be over within some 10 years.  To the best of my knowledge, the most advanced material in this matter is the thermodynamic analysis of the oil industry taken as a whole system (OI) produced by The Hill’s Group (THG) over the last two years or so (http://www.thehillsgroup.org).

THG are seasoned US oil industry engineers led by B.W. Hill.  I find its analysis elegant and rock hard.  For example, one of its outputs concerns oil prices.  Over a 56 year time period, its correlation factor with historical data is 0.995.  In consequence, they began to warn in 2013 about the oil price crash that began late 2014 (see: http://www.thehillsgroup.org/depletion2_022.htm).  In what follows I rely on THG’s report and my own work.

Three figures summarise the situation we are in rather well, in my view.

Figure 1 – End Game

oilendgame

For purely thermodynamic reasons net energy delivered to the globalised industrial world (GIW) per barrel by the oil industry (OI) is rapidly trending to zero.  By net energy we mean here what the OI delivers to the GIW, essentially in the form of transport fuels, after the energy used by the OI for exploration, production, transport, refining and end products delivery have been deducted.

However, things break down well before reaching “ground zero”; i.e. within 10 years the OI as we know it will have disintegrated. Actually, a number of analysts from entities like Deloitte or Chatham House, reading financial tealeaves, are progressively reaching the same kind of conclusions.[1]

The Oil Age is finishing now, not in a slow, smooth, long slide down from “Peak Oil”, but in a rapid fizzling out of net energy.  This is now combining with things like climate change and the global debt issues to generate what I call a “Perfect Storm” big enough to bring the GIW to its knees.

In an Alice world

At present, under the prevailing paradigm, there is no known way to exit from the Perfect Storm within the emerging time constraint (available time has shrunk by one order of magnitude, from 100 to 10 years).  This is where I think that Doomstead Diner’s readers are guessing right.  Many readers are no doubt familiar with the so-called “Red Queen” effect illustrated in Figure 2 – to have to run fast to stay put, and even faster to be able to move forward.  The OI is fully caught in it.

Figure 2 – Stuck on a one track to nowhere

perfectstorm

The top part of Figure 2 highlights that, due to declining net energy per barrel, the OI has to keep running faster and faster (i.e. pumping oil) to keep supplying the GIW with the net energy it requires.  What most people miss is that due to that same rapid decline of net energy/barrel towards nil, the OI can’t keep “running” for much more than a few years – e.g. B.W. Hill considers that within 10 years the number of petrol stations in the US will have shrunk by 75%…

What people also neglect, depicted in the bottom part of Figure 2, is what I call the inverse Red Queen effect (1/RQ). Building an alternative whole system takes energy that to a large extent initially has to come from the present fossil-fuelled system.  If the shift takes place too rapidly, the net energy drain literally kills the existing BAU system.[2] The shorter the transition time the harder is the 1/RQ.

I estimate the limit growth rate for the alternative whole system at 7% growth per year.

In other words, current growth rates for solar and wind, well above 20% and in some cases over 60%, are not viable globally.  However, the kind of growth rates, in the order of 35%, that are required for a very short transition under thePerfect Storm time frame are even less viable – if “we” stick to the prevailing paradigm, that is.  As the last part of Figure2 suggests, there is a way out by focusing on current huge energy waste, but presently this is the road not taken.

On the way to Olduvai

In my view, given that nearly everything within the GIW requires transport and that said transport is still about 94% dependent on oil-derived fuels, the rapid fizzling out of net energy from oil must be considered as the defining event of the 21st century – it governs the operation of all other energy sources, as well as that of the entire GIW.  In this respect, the critical parameter to consider is not that absolute amount of oil mined (as even “peakoilers” do), such as Million barrels produced per year, but net energy from oil per head of global population, since when this gets too close to nil we must expect complete social breakdown, globally.

The overall picture, as depicted ion Figure 3, is that of the “Mother of all Senecas” (to use Ugo’s expression).   It presents net energy from oil per head of global population.[3]  The Olduvai Gorge as a backdrop is a wink to Dr. Richard Duncan’s scenario (he used barrels of oil equivalent which was a mistake) and to stress the dire consequences if we do reach the“bottom of the Gorge” – a kind of “postmodern hunter-gatherer” fate.

Oil has been in use for thousands of year, in limited fashion at locations where it seeped naturally or where small well could be dug out by hand.  Oil sands began to be mined industrially in 1745 at Merkwiller-Pechelbronn in north east France (the birthplace of Schlumberger).  From such very modest beginnings to a peak in the early 1970s, the climb took over 220 years.  The fall back to nil will have taken about 50 years.

The amazing economic growth in the three post WWII decades was actually fuelled by a 321% growth in net energy/head.  The peak of 18GJ/head in around 1973, was actually in the order of some 40GJ/head for those who actually has access to oil at the time, i.e. the industrialised fraction of the global population.

Figure 3 – The “Mother of all Senecas”

seneca
In 2012 the OI began to use more energy per barrel in its own processes (from oil exploration to transport fuel deliveries at the petrol stations) than what it delivers net to the GIW.  We are now down below 4GJ/head and dropping fast.

This is what is now actually driving the oil prices: since 2014, through millions of trade transactions (functioning as the“invisible hand” of the markets), the reality is progressively filtering that the GIW can only afford oil prices in proportion to the amount of GDP growth that can be generated by a rapidly shrinking net energy delivered per barrel, which is no longer much.  Soon it will be nil. So oil prices are actually on a downtrend towards nil.

To cope, the OI has been cannibalising itself since 2012.  This trend is accelerating but cannot continue for very long. Even mainstream analysts have begun to recognise that the OI is no longer replenishing its reserves.  We have entered fire-sale times (as shown by the recent announcements by Saudi Arabia (whose main field, Ghawar, is probably over 90% depleted) to sell part of Aramco and make a rapid shift out of a near 100% dependence on oil and towards “solar”.

Given what Figure 1 to 3 depict, it should be obvious that resuming growth along BAU lines is no longer doable, that addressing CC as envisaged at the COP21 in Paris last year is not doable either, and that incurring ever more debt that can never be reimbursed is no longer a solution, not even short-term.

Time to “pull up” and this requires a paradigm change capable of avoiding both the RQ and 1/RQ constraints.  After some 45 years of research, my colleagues and I think this is still doable.  Short of this, no, we are not going to make it, in terms of replacing fossil resources with renewable ones within the remaining timeframe, or in terms of the GIW’s survival.

Next: 

Part 2 – Enquiring into the appropriateness of the question

Part 3 – Standing slightly past the edge of the cliff

 

[1] See for example, Stevens, Paul, 2016, International Oil Companies: The Death of the Old Business Model, Energy, Research Paper, Energy, Environment and Resources, Chatham House; England, John W., 2016, Short of capital? Risk of underinvestment in oil and gas is amplified by competing cash priorities, Deloitte Center for Energy Solutions, Deloitte LLP.  The Bank of England recently commented: “The embattled crude oil and natural gas industry worldwide has slashed capital spending to a point below the minimum required levels to replace reserves — replacement of proved reserves in the past constituted about 80 percent of the industry’s spending; however, the industry has slashed its capital spending by a total of about 50 percent in 2015 and 2016. According to Deloitte’s new study {referred to above], this underinvestment will quickly deplete the future availability of reserves and production.”

[2] This effect is also referred to as “cannibalising”.  See for example, J. M. Pearce, 2009, Optimising Greenhouse Gas Mitigation Strategies to Suppress Energy Cannibalism, 2nd Climate Change Technology Conference, May 12-15, Hamilton, Ontario, Canada.  However, in the oil industry and more generally the mining industry, cannibalism usually refers to what companies do when there are reaching the end of exploitable reserves and cut down on maintenance, sell assets at a discount or acquires some from companies gone bankrupt, in order to try and survive a bit longer.  Presently there is much asset disposal going on in the Shale Oil and Gas patches, ditto among majors, Lukoil, BP, Shell, Chevron, etc….  Between spending cuts and assets disposal amounts involved are in the $1 to $2 trillions.

[3] This graph is based on THG’s net energy data, BP oil production data and UN demographic data.